Puerto Rico Is Struggling to Meet Its Clean Energy Goals, Despite Biden’s Support

After a year marked by major power outages, high-profile resignations by public officials and widespread protests in the streets of Puerto Rico, the Biden administration is responding to calls from residents to help the U.S. territory quickly transition to renewable energy.

Biden has pledged to align more than $12 billion in federal aid earmarked to repair Puerto Rico’s tattered electrical grid and boost its struggling economy with the goals of the territory’s landmark 2019 clean energy law, according to an agreement reached by the administration and the Puerto Rican government in February.

The law requires that 100 percent of the territory’s electricity come from renewable sources by 2050. The legislation also sets ambitious benchmarks along the way, including 40 percent renewable energy by 2025 and 60 percent by 2040.

Environmentalists celebrated the February agreement. Many residents have called the record amount of incoming federal aid a “once-in-a-generation” opportunity to build a modern energy system for Puerto Rico powered by solar and wind energy.

But Puerto Rico’s public utility—the Puerto Rico Electric Power Authority, or PREPA—said this month that it doesn’t believe it can achieve the first target.

“To say that in three years there will be 40 percent of energy production in a stable, commercial manner and in compliance with all the requirements in service, I really don’t see it viable,” Josué Colón, PREPA’s executive director, said in Spanish at a hearing on March 3 for Puerto Rico’s Senate energy committee.

His response immediately raised questions about the utility’s commitment to the mandates of the law, known as Act 17, and highlighted a growing tension between its executives and a coalition of academics, local businesses and environmental groups that is calling for the rapid buildout of renewable energy on the island, especially rooftop solar. 

Many people in the coalition also have accused PREPA of “being held hostage” by a powerful gas industry that is now playing a role in Puerto Rico’s efforts to pay down the massive debt that has weighed on the economy.

When Puerto Rico passed Act 17, its proponents saw it as the best path for avoiding the kind of devastation the territory experienced in the wake of Hurricane Maria.

The 2017 hurricane, a Category 4 storm, resulted in nearly 3,000 deaths and uprooted much of the Caribbean island’s electrical grid, leaving millions of people without power for months. Some areas of Puerto Rico didn’t have their electricity restored for nearly a year.

Energy analysts and climate activists have said that renewable power, when paired with battery storage and smaller electrical grids, is better suited to withstand the kinds of increasingly destructive storms the territory will face as the climate crisis worsens. Solar and wind energy circumvent the complications associated with importing fuels, they say, and smaller grids help to prevent widespread blackouts when a major power plant goes offline or a key transmission line goes down.

Climate experts also say the world’s governments must rapidly transition away from fossil fuels and toward renewable energy in the coming decades to avoid the worst consequences of global warming projected for the end of the century.

But five years after Hurricane Maria, Puerto Rico is struggling to bring its clean energy vision into reality, even as the Biden administration pledges to align federal investment with the territory’s clean energy law.

Colón, PREPA’s executive director, said he expects Puerto Rico to draw just a quarter of its total electricity from solar, wind and hydroelectric by 2025. The territory currently generates just 3 percent of its total power from renewables, according to the U.S. Energy Information Administration’s latest energy profile, though Colón said at the March 3 hearing that the figure is closer to 5 percent.

At the hearing, Colón also suggested that Puerto Rico lawmakers consider examining and adjusting the territory’s clean energy targets to better fit the current situation.

Last year, LUMA Energy, a private company that was founded by investment firms that specialize in gas energy infrastructure and utility management, took over PREPA’s electricity transmission system as part of a broader plan to address the public utility’s $9 billion debt. American creditors bought up a sizable portion of that debt years ago, hoping to get repaid with interest after federal disaster aid began flowing into Puerto Rico.

Already, more than $4.6 billion worth of projects to repair and upgrade Puerto Rico’s power system have been approved for funding by local regulators, with construction expected to begin this year. But none of the more than 100 projects that have so far been approved by the Puerto Rico Energy Bureau involves new renewable energy, according to government documents reviewed by Inside Climate News.

The utility has also been pursuing plans to build a new natural gas-fired power plant on the northern shore of the island, according to documents filed with the Puerto Rico Energy Bureau late last year. The utility is scheduled to submit the results next month of a feasibility study it conducted for the power plant, and environmental groups are asking energy regulators to halt any further public funding of those studies.

“It would definitely be a throwaway to allow PREPA or its contractors to continue to study that option” using public funding, said Ruth Santiago, a longtime environmental lawyer in Puerto Rico who is representing the environmental groups challenging PREPA’s gas infrastructure plans. “If we’re at 3 percent renewables and 44 percent gas, what does that tell you? How do you diversify? You go renewables.”

PREPA officials have said it would be necessary to update old fossil fuel equipment and even build new gas-fired power plants to stabilize Puerto Rico’s shoddy energy grid and harden it to better withstand storms while the territory explores how to best introduce new renewable energy capacity. The utility has also said it can pursue plans to develop a new gas power plant and gas delivery system on the north coast of the island in a way that wouldn’t interfere with the territory’s renewable energy mandates.

LUMA Energy has also pushed back against accusations that it’s not doing enough to advance renewable energy projects in Puerto Rico. The company has processed thousands of requests to connect privately owned solar systems to the island’s grid. Those requests had sat unprocessed since before LUMA took over, but thousands more of the requests remain in limbo.

“People are trying to portray us as anti-solar and it’s absolutely not true,” Wayne Stensby, LUMA Energy’s CEO, said at a Congressional hearing in October.

While most Puerto Ricans see renewable energy as the island’s future, there is some disagreement over how to get there. Some local officials have argued that installing more natural gas will help stabilize the island’s mangled grid and is necessary to provide the kind of big power needed for Puerto Rican manufacturers, making it the priority. But energy analysts have questioned that approach, warning that building any new fossil fuel infrastructure will only make transitioning away from it later on more difficult and costly. New gas power plants, for example, are meant to operate for at least 30 years and can saddle residents with construction costs for decades.

In 2019, PREPA officials proposed building several new gas-fired power plants, including one near San Juan and another in the south, near Yabucoa. The utility also wanted to build new gas terminals to service the plants.

The Puerto Rico Energy Bureau rejected those proposals, saying they were out of line with Act 17. In 2020, the bureau ordered PREPA to procure contracts for at least 3.5 gigawatts of renewable energy development and 1.5 gigawatts of battery storage by 2025. PREPA is more than a year behind schedule on those efforts, however, and roughly two-thirds of the required contracts have yet to be fulfilled.

Some clean energy advocates also worry the utility will fail to follow through on its renewable energy commitments. A decade ago, Puerto Rico passed a renewable portfolio standard that required the territory to get 20 percent of its electricity from renewable sources by 2035. But PREPA built just six out of the 65 power purchase agreements the utility had signed as part of its plan to meet that standard, said Carlos Velazquez, program director for the Interstate Renewable Energy Council, a clean energy advocacy group.

Still, Velazquez said, the new agreement with the Biden administration could help the utility get back on track to reach later benchmarks of Puerto Rico’s clean energy law, especially if public officials start taking a more serious look at building out solar energy on the island. A 2021 study by the Institute for Energy Economics and Financial Analysis, an energy research firm, found that rooftop solar could reasonably generate 75 percent of all of Puerto Rico’s electricity within 15 years.

As part of the February agreement, the Biden administration will also fund a major study that aims to lay out a roadmap for how Puerto Rico can achieve its clean energy goals. Velazquez sits on an advisory committee for that study, which is set to be completed in 2024.

“Just because we’re not going to get to 40 percent [by 2025] does not take away from my optimism,” Velazquez said. “I think we’re going to be able to reach critical mass and critical speed once we have all the right components in place.”